You Talking to Me?

In his remarks on health care legislation today, President Barack Obama didn’t hedge his bets on the subject of cost, stating expressly that a revamped health care system would lead to cheaper care for insured families. "But here’s what else reform will mean for you — and this is for people who have health insurance: You will save money," he said. He probably should have been a little more equivocal. The House plan released a day ago is partly funded by tax increases on the wealthiest, meaning that a high-earning family with insurance may in fact find themselves paying more overall.

Obama said during the campaign that his health care plan would save $2,500 per family per year. (Update: His full quote was that "we’ll lower premiums by up to $2,500 for a typical family per year.") We disputed that at the time, but let’s imagine it were true. The House health care plan would add a surtax on the wealthy that would start at 1 percent on income over $350,000 for couples and graduate to 5.4 percent on income over $1 million. According to the Tax Policy Center, households making between $500,000 and $1 million per year would pay an average of $2,769 more in taxes in 2011, canceling out a potential $2,500 premium savings. Those making more than $1 million would pay much more. Granted, these are very wealthy families, in the top 1 percent of U.S. earners. As we said in a previous post, it’s not a whole lot of people — but it’s not nobody, either. Even with a pie-in-the-sky $2,500 in premium savings, about 1.3 million households could end up paying a greater net amount under the House’s proposed health care system. With more realistic savings that number would be higher. Assuming that the president was addressing these wealthy folks as well as his poorer constituents, it was inaccurate for him to say "you will save money."